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Local capacity building in Nigeria's shipping industry

Article - December 12, 2012
The Nigerian Chamber of Shipping encourages dialogue between local and foreign players to improve the skills of Nigerians, promote partnerships and increase Nigerian participation
With oil production of some 2.5 million barrels per day, the Nigerian economy is heavily dependent on the hydrocarbons sector, which in turn is heavily dependent on the maritime industry to export crude and import refined products.

However, the industry remains largely in the hands of foreign companies – something that is changing, albeit slowly, thanks to the Local Content Act and the work of the Nigerian Content Development and Monitoring Board, which mainly target increasing local participation in the oil and gas sector. The Local Content Act, a revised and more potent version of the 2003 Cabotage Law, is designed to empower Nigerians by encouraging the use of their vessels, as well as by developing their capacity so they can better compete with foreign shippers.

Ify Anazonwu-Akerele, Director General of the Nigerian Chamber of Shipping (NCS), recalls how the chamber worked closely with the National Assembly in drafting the Content Act so as to ensure that the maritime industry was included. “It concentrated more on oil and gas, manufacturing, drilling, pipes, etc. and they almost forgot the shipping,” she claims. “Shipping is a very tangible aspect of the oil and gas industry because without the vessels, you cannot move the crude.”

Nigerians can learn from their foreign partners... I want proper, full participation.

Ify Anazonwu-Akerele,
Director General of the Nigerian Chamber of Shipping

The NCS was established a decade ago to implement the laws and regulations that favoured Nigerian operators within Nigerian waters. The chamber helped individuals to enter the business and encouraged their participation while upholding shipping industry best practices.

Moreover, membership in the NCS is open to both Nigerians and foreigners alike, “so that we can create a synergy, with knowledge and technology transfer,” says the Director General, recognising the inherent need to partner with foreigners in order to build not only local skills, but equipment as well.

“At first there was a very authoritarian approach that we must get all the foreigners out,” recalls Ms Anazonwu-Akerele. “But we asked, if all of the foreigners are out, where will you get your vessels? To get a vessel, you need a foreign partner.

“Nigerians can learn from their foreign partners. Maybe in ten years’ time the inequity will be erased and the foreign stakes can be sold to the locals.”

She acknowledges that first, capacity building and training are essential so that Nigerians– from CEOs and upper management down to the labourers – deserve their place in the industry and are not just there to fill the quotas. “I want proper, full participation,” she highlights, adding that the country could certainly use more suitably equipped, private training academies, as the government-run ones are “outdated and inefficient”.

Over the past several years, Nigerian ports have been privatised and modernised to better deal with ever-increasing volumes of cargo, which ultimately led to a bottlenecking dilemma. Indeed, more than 70 per cent of cargo from West Africa arrives in Nigeria, and 2011 saw 10 per cent more cargo than the previous year. Indeed, Nigerian ports are the principle gateway for the majority of goods that enter and leave the country.

Ms Anazonwu-Akerele agrees that the private sector must participate in port development if they are to run smoothly. “The authorities are doing all they can to ensure the privatisation and concessions of the ports, because they understand that the private sector has to be encouraged. If the private sector is not involved in the economy, forget about it,” she remarks.

Ms Anazonwu-Akerele’s view on transforming Nigeria into the West African shipping gateway is also practical and realistic. “We could automatically become the hub by default, but we have a long way to go to earn that title,” she says. “But by fully embracing privatisation, the landlord approach of the Nigerian Ports Authority is beginning to yield results. We are in a very strategic position and we do have the capacity, as long as we are allowed to implement it.”

Shipping is currently overseen by Nigeria’s Ministry of Transport and NIMASA, the Nigerian Maritime Administration and Safety Agency. Nevertheless, Ms Anazonwu-Akerele advocates the creation of a new ministry, or at the very least a specialised body, to take sole care of Nigeria’s maritime industry, given its potential magnitude in the national economy. “I think that once the content laws have been properly implemented and the numbers start rising from 1-2 per cent to 10 per cent, the government will say that Transport cant handle this, and there needs to be a shipping minister.”